Preview

Regional Trading Blocs

Powerful Essays
Open Document
Open Document
2350 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Regional Trading Blocs
INTRODUCTION

:

A regional trading bloc is a group of countries within a geographical region that protect themselves from imports from non-members. Trading blocs are a form of economic integration, and increasingly shape the pattern of world trade.
In general terms, regional trade blocks are associations of nations at a governmental level to promote trade within the block and defend its members against global competition. Defense against global competition is obtained through established tariffs on goods produced by member states, import quotas, government subsidies, onerous bureaucratic import processes, and technical and other non-tariff barriers.
Since trade is not an isolated activity, member states within regional blocks also cooperate in economic, political, security, climatic, and other issues affecting the region.
There are several types of trading bloc:
Preferential Trade Area
Preferential Trade Areas (PTAs) exist when countries within a geographical region agree to reduce or eliminate tariff barriers on selected goods imported from other members of the area. This is often the first small step towards the creation of a trading bloc.
Free Trade Area
Free Trade Areas (FTAs) are created when two or more countries in a region agree to reduce or eliminate barriers to trade on all goods coming from other members.
Customs Union
A customs union involves the removal of tariff barriers between members, plus the acceptance of a common (unified) external tariff against non-members. This means that members may negotiate as a single bloc with 3rd parties, such as with other trading blocs, or with the WTO.
Common Market
A ‘common market’ is the first significant step towards full economic integration, and occurs when member countries trade freely in all economic resources – not just tangible goods. This means that all barriers to trade in goods, services, capital, and labour are removed. In addition, as well as removing tariffs, non-tariff
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    Confidentiality and the Case Worker: Technological Advancements Affecting the Economy
    • 1387 Words
    • 6 Pages

    Confidentiality and the Case Worker: Technological Advancements Affecting the Economy

    Individual countries are not limited to the amount of trading blocs that they can take part in; however, it seems that countries with either like interests or geographic closeness seem to work together more successfully. Some of the most notable trade blocs in the news right now are the North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States, the North Atlantic Treaty Organization (NATO), and the European Union (EU).…

    • 1387 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Mgt 448 Week 2 Paper
    • 679 Words
    • 3 Pages

    Mgt 448 Week 2 Paper

    The advantage of integration regionally is that there are no imposed restrictions on the trade. This will allow countries to focus on the services and produced goods in a more efficient manner to drive down cost, which will boost the economy. The free trade without restrictions allows lowering of prices of goods which increases output of goods that are in demand by other countries which will create jobs increased goods lower operating cost. Also with compiling resources with the neighboring country will allow expansion in an economic outlook, and also persuay political views from major corporations as everyone follows the trend to reduce…

    • 679 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Fins2622 Notes
    • 6821 Words
    • 6 Pages

    Fins2622 Notes

     Free Trade: David Ricardo (support free trade) o Theory of comparative advantage: For two nations without input factor mobility, specialisation and trade could result in increased total output and lower costs than if each nation tried to produce in isolation.  Both nations can benefit from trade if each specialises in good that they have the lowest opportunity cost, even if one economy is more efficient in making everything.  However, Comparative advantage in not static, and changes over time in reality.  Also, comparative advantage assumes that factors of production can’t move between countries  therefore comparative advantage is set to be outdated  production and employment usually moves to the lowest cost economies  Reality: Countries encourage exports, but limit imports o Due to mecantalism  i.e. total world wealth is limited and trade is a 0‐sum game if one country benefits, the other loses in order to win, you encourage exports  HOW? Through colanising  therefore legislated that the country could only trade with colonised country.  Who gains from free trade?  Some say that comparative advantage is just a way for developed economies to gain  Because before, developed economies were very protected (in order to establish their industries), and now they want everyone to do free trade (to benefit themselves). Since developed economies developed their industries a long time ago, they usually have a comparative advantage in high technology products (which lead to greater growth compared to agricultural products), whilst the developing countries specialise in the lower growth agricultural products.  Creation of international institutions: GATT, WTO  Creation of trade blocs…

    • 6821 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    The Pros And Cons Of NAFTA
    • 478 Words
    • 2 Pages

    The Pros And Cons Of NAFTA

    In conclusion the adverse consequences of trading blocs have led to conflict of interests among member states. Despite the advantages created, the significance of the challenges warrants the review of the efficiency of trading blocs. This is to ensure that there is harmonization of the trading process and benefitting of member…

    • 478 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    Organizational Analysis Outline
    • 1424 Words
    • 6 Pages

    Organizational Analysis Outline

    Russia, USA, East Asian Nations (Australia, Japan, Philippines, Singapore, South Korea, and Thailand) is part of the regional alliances. Economic integration is China is growing at an extremely fast pace and needs to open its market up to imports. The physical environment and its effect on trade China accounts for 23% of world population, is the third largest country, third largest diverse population, Communists country, and has an increasing effect on global trading.…

    • 1424 Words
    • 6 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    International Trade Social Justice + Equity Implications
    • 250 Words
    • 1 Page

    International Trade Social Justice + Equity Implications

    * Regional Trade Agreements link individual countries or regions, and are a good arrangement between equal partners with similar-sized economies. But when a rich country has a trade agreement with a poor one, the richer, stronger economy always benefits – particularly in Free Trade Agreements (FTAs), which often remove the poor country’s right to use tariffs and quotas to protect its own industries and farms from cheap imports.…

    • 250 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    Print ECN 340
    • 586 Words
    • 1 Page

    Print ECN 340

    Free trade agreements to promote international investment to optimize the industrial structure and resource allocation. The free trade agreement to promote economic cooperation relationship between member countries.…

    • 586 Words
    • 1 Page
    Good Essays
    Read More
  • Powerful Essays

    Case Study
    • 2618 Words
    • 11 Pages

    Case Study

    The specific benefits of countries joining under the free trade agreements (“FTA”) are likely because of FTA that promotes innovation and competition. This is because it makes the economic sense to buy a product more another who specializes in such production or who can make it more easily or for less cost. Indeed, access to a greater variety of goods and services is the purpose of trade. Imports, then, are not a sacrifice, a necessary evil for the good of exporting. One exports so that one may acquire goods and services in return. This logic is evident on a personal level as well.…

    • 2618 Words
    • 11 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Chapter 9 Regional Trading Arrangements
    • 4854 Words
    • 20 Pages

    Chapter 9 Regional Trading Arrangements

    Customs union theory reasons that the formation of a customs union will decrease members’ real welfare when the:…

    • 4854 Words
    • 20 Pages
    Powerful Essays
    Read More
  • Good Essays

    Regional Integration for and Against Articles
    • 772 Words
    • 4 Pages

    Regional Integration for and Against Articles

    Integrating regions into a trading bloc can have some positive and influential aspects for the countries within that trading bloc. Free trade within these nations can helps secure stability within the economies, generate more product at a cheaper rate then without the integration, and assist with creating peace between the nations with peaceful conflict resolutions. The Association of the Southeast Asian Nations has created such a trading block between 10 nations over three decades ago which has been helping to build and sustain the economy of these nations in Southeast Asia.…

    • 772 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    Nafta: the Good, the Bad and the Ugly
    • 1374 Words
    • 6 Pages

    Nafta: the Good, the Bad and the Ugly

    In 1994, Mexico, Canada, and the United States entered into one of the worlds largest free trade regions called the North American Free Trade Agreement (NAFTA) (Salas, 2005). The most noteworthy feature of the agreement is that it between two highly economic and socially developed countries and one still developing. The boost in trade and the increased financial flow between these countries has resulted in one of the more economically merged areas in the world.…

    • 1374 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Free Trade In Australia
    • 1082 Words
    • 5 Pages

    Free Trade In Australia

    Many countries in the world are apart of free trade areas that have free trade agreements with other countries. What a free trade area? According to the World Book definition, a free trade area is, “an area in a country where goods can be imported without paying custom duties (import taxes). Foreign traders may store, exhibit, assemble, or process products in these zones before shipping them elsewhere for sale or use” (“World Book” 500). These free trade areas can differ from an entire city or territory where no customs duties are collected. Free trade areas are created to encourage the act of foreign trade by allowing countries to trade their goods in a more cheaply way than making the good in their home nation. Free trade can have positive…

    • 1082 Words
    • 5 Pages
    Good Essays
    Read More
  • Good Essays

    Nafta, Eu, Wto, & Gatt
    • 1098 Words
    • 5 Pages

    Nafta, Eu, Wto, & Gatt

    The North American Free Trade Agreement was formed on January 1, 1994 with the final provisions being fully implemented as of January 1, 2008. The agreement is meant to eliminate a majority of the trade barriers, as well as invest in the three member nations: Canada, Mexico, and the United States. NAFTA is viewed as one of the most successful trade agreements in history and has helped provide increases in agricultural trade, as well as investments between the three member countries. The purpose of the North American Free Trade Agreement is to eliminate trade barriers, which is mostly done by eliminating a number of non-tariff measures that affect agricultural trade between Canada, Mexico, and the United States. The main criticism is that in order for products received from other countries (Asia, Europe, etc) to be traded duty-free or at a lower tariff between member nations, they must first be significantly transformed or processed by one member nation before it can be sent to one of the other two nations. This causes additional costs associated with trying to alter the products and can also be time consuming due to sanitary and safety considerations. There is also a need for definition of what “significantly” means in this process, especially with the trade of edible products.…

    • 1098 Words
    • 5 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    International Trade
    • 375 Words
    • 2 Pages

    International Trade

    Currently, the regulation of international trade is done through the World Trade Organization at the global level, and through several other regional arrangements such as MERCOSUR in South America, the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, and the European Union between 27 independent States.…

    • 375 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Globalisation VS regionalisation
    • 1194 Words
    • 5 Pages

    Globalisation VS regionalisation

    In the past decades, numerous trading blocs have been created throughout the world, playing a significant role in the world economy and trade. However, as regionalization became of an increasing interest, there has been much discussion on its effects on globalisation and their relationship, as it is the other important trend in the world economy development next to regionalization. Discussion on the relationship between these two trends has been filled with ambiguity and will be clarified through the following pages.…

    • 1194 Words
    • 5 Pages
    Good Essays
    Read More

Related Topics